On Protection Of Shareholders' Rights To Dividend

Shareholders are aimed at obtaining returns by investing money in a company. Shareholders' rights to dividend, as their right of obtaining profits from the company, is significant for shareholders. When there are profits to be distributed, whether shareholders' rights to dividend can be fulfilled depends on the will of the company, which is legally controlled by majority shareholders under capital majority rule. Powers are born with the inclination of self-aggrandizement. majority shareholders often make use of the control of the company, vested by capital majority rule, to weaken minority shareholders's participation of company's affairs, and even squeeze them by means of not paying dividend for a long time. In this case, capital majority rule is dissimilated,the company has turned into the tool of majority shareholders for realizing their own interests, while the legal rights of minority shareholders have been imperiled. Where there is a right, there is a remedy. Essence inequality among shareholders caused by the dissimilation of capital majority rule requires effective protection of shareholders' rights to dividend. In real life, examples of that can be found everywhere. The returns shareholders expect when the company is established are not obtained, and in the long run it is not beneficial to incent the enthusiasm of investors and not beneficial for long-term development of the company. The research of shareholders' rights to dividend, therefore, has significance both in theory and practice, which is beneficial to deepen the understanding of capital majority rule and the theory of shareholders' rights, and to solve the problems of imperiling shareholders' rights to dividend in real life.The present paper, based on the comparison and learning different means of protecting shareholders' rights to dividend in different countries, analyzes the actuality of protecting shareholders' rights to dividend and its causes and then put forth some vision for improving the protective mechanism of shareholders' rights to dividend in our country, in the hope of helping to enhance the protection of shareholders' rights to dividend and promoting the realization of essence equality among shareholders. It consists of four parts:The first part of this paper is the general of shareholders' rights to dividend, defining the concept and the classification of shareholders' rights to dividend and the significance of protecting it. Firstly, define the concept of shareholders' rights to dividend. Shareholders' rights to dividend is the right of shareholders based on their qualification and status as shareholders requesting the company distribute dividend to them. As one of the important property rights of shareholders, it is a concentrated expression of the aim of shareholders investing a company. Secondly, shareholders' rights to dividend can be distinguished into abstract one and concrete one. Abstract shareholders' rights to dividend based on their qualification and status as shareholders is a type of power and functions of shareholder right, a type of intrinsic and expectant right. While concrete shareholders' rights to dividend is a type of vested right. Thirdly, it analyzes the basis and necessity of protecting shareholders' rights to dividend. Abusing capital majority rule causes shareholders' behavior of oppression. The essence inequality among shareholders resulted from "legal" oppression of the shareholders' rights to dividend of minority shareholders, objectively requests protection of shareholders' rights to dividend. Lastly, it defines the significance of protecting shareholders' rights to dividend. Protecting shareholders' rights to dividend is beneficial to realize the justice of a society, to promote the increase of investment, to improve the managing mechanism of a company, to speed the long-term development of a company.The second part of this paper introduces the means of protecting shareholders' rights to dividend. The means of protecting shareholders' rights to dividend in different countries and regions can be separated into two categories, one is beforehand protection and the other is post relief. Beforehand protection is fulfilled by means of contracts. Shareholders can decide in advance in the articles of corporation and shareholder agreement the proportion and the method of distribution, dividend option, mandatory dividend distribution and withdraw mechanism when there is no dividend to be distributed. Once the corresponding conditions emerge, shareholders can exercise their own rights according to the agreement or the articles. Post relief can be mainly realized by the coercive intervene of law and the methods vary due to different qualities of shareholders' rights to dividend. Concrete shareholders' rights to dividend has the quality of credit, whose protecting method is similar with that of ordinary credit. The protecting methods of abstract shareholders' rights to dividend are direct protection and indirect protection, among which the action of coercive distribution is a method of direct protection and the others are methods of indirect protection.The third part of this paper analyzes the actuality of protecting shareholders' rights to dividend in our country. Firstly, it introduces rules of law regulating shareholders' rights to dividend, which are mainly Corporations Law and relevant rules issued by China Securities Regulatory Commission. Secondly, it analyzes problems existing in protecting shareholders' rights to dividend in our country. These phenomena of not distributing dividend are still serious and it is obvious that there are a few distributions in cash and minority shareholders are suppressed in dividend distribution. Lastly, it analyzes causes of ineffective protection of shareholders' rights to dividend in our country. Interest conflicts among shareholders, unreasonable ownership structure, weakening right consciousness of minority shareholders and ineffective protection by the current law system is main reason.The fourth part of this paper is the reflection on improving our protecting mechanism of shareholders' rights to dividend. On the basis of analyzing causes of ineffective protection of shareholders' rights to dividend in our country, this part put forth some visions for improving the protecting mechanism of shareholders' rights to dividend in our country, including enhancing the risk consciousness of shareholders, improving systems of information disclosure, setting up the action of compulsory distribution, relaxing conditions on the action of share repurchase and defining the action of company disbandment as the ultimate relief method. Among them, the action of compulsory distribution is the main core, together with which the action of share repurchase and the action of company disbandment constitute the protecting system of shareholders' rights to dividend.